The value of every business, the value of a farm, the value of an apartment house, the value of any economic asset, is 100% sensitive to interest rates because all you are doing in investing is transferring some money to somebody now in exchange for what you expect the stream of money to be, to come in over a period of time, and the higher interest rates are the less that present value is going to be. Warren Buffett once said this about interest rates: Central banks are increasing interest rates to try to bring inflation under control. Investors have been trying to get to grips with inflation and rising interest rates. There has been a lot of volatility in 2022. This could explain what has happened to the iShares S&P 500 ETF. To truly know the answer to that question, you’d need to ask the buyers and sellers of those shares of the past month why they transacted at the price they did. For example, over the past month, the Johnson & Johnson share price is down 4.7%. These numbers indicate that the biggest shares actually performed much better than the overall S&P 500 index – it was other index constituents that didn’t do as well. Over the last month, Apple shares are up 17.75%, Microsoft shares are up 15.4%, Alphabet shares are up 12%, Amazon shares are up 25.9% and Tesla shares are up 28.6%. Let’s have a look at how some of the biggest positions have performed over the past month, as these are the ones that would have the biggest influence on the overall iShares S&P 500 ETF performance. Of course, there are hundreds of other names like Costco, Disney and McDonalds. These are some of the biggest holdings in the S&P 500 ETF on 12 August 2022: What shares are in the iShares S&P 500 ETF?

The S&P 500 represents a portfolio of around 500 businesses. When the group of shares that the ETF owns go down in value, then this would hurt the value of the ETF.

The same can happen going downwards as well. If, collectively, the value of the businesses that an ETF owns go up, then this benefits the ETF’s value. That’s a stronger performance than the 6.2% return for the S&P/ASX 200 Index(ASX: XJO).Īs some investors may be aware, the performance of an exchange-traded fund (ETF) is dictated by the underlying holdings. The iShares S&P 500 ETF ( ASX: IVV) has been a solid performer for investors over the last month, it has risen by 7%.

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